Arguably online shopping is the fastest growing sector in India and has seen billions in investment in the last couple of years. But it isn’t exactly a new phenomenon. Online shopping has been prevalent in India since early 2000s. The missing factor however were issues like payments, logistics, trust in the medium and thus mass adoption is only happening now.
It isn’t uncommon to hear talks of how e-commerce sites are making a loss with investors’ money and trying to succeed at user adoption. This means discounted products and unbelievable service to make the entire ecosystem work. However there are underlying issues that no one seems to be noticing.
A friend wanted to start selling online and registered himself on eBay. He has been trying to sell online for over a month now and it has been a pain for a couple of reasons.
Scams –
Recently we heard about a man in Hyderabad duping Flipkart for more than 20 lakh rupees. I have come across an incident where a person ordered Motorola Moto G (3rd Gen) and asked for a return within the 30-day timeline. In place of Moto G (3rd Gen), he returned back the Moto G 2nd Gen (old phone) and claimed money for the new phone. You have heard similar stories, right?
I agree that these are very small/pity issues for the e-commerce giants to care about. Given that larger e-commerce sites do not have the bandwidth to bring checks and balances to avoid scams at such a small scale, consumers & scammers are being motivated to dupe online sellers.
These new-age digital scammers try to repeat the same with smaller players too which is not cool. My friend sold a Galaxy S4 via eBay. After two weeks of delivery, the person files a claim with eBay that the phone was damaged. And guess what? eBay refunded the money and my friend had to bear the loss.
This is the image the buyer sent to eBay to initiate a refund
I fail to understand how can this phone work for 14 days and then there is a damage to this extent. Upon asking the seller to return the phone, he shipped an empty envelope weighing 100gms and eBay didn’t support my friend!
Discounting –
One of the item my friend was selling was “Sandisk microSD Class 4 8GB Card” for Rs. 120, the cheapest on the Internet on that day as per our findings. Well, cheapest on the Internet is not enough apparently:
This conversation spanned across four days with the buyer pestering my friend for discounts and faster delivery. Discounts is making the customers greedy and mindset is degrading. Indian consumers are so accustomed to discounts that margins would always be slim and making profits in the e-commerce biz seems unlikely with the current state.
Amazon had it’s “Great Indian Festive Sale” between 13th-17th October and immediately announced “Great Indian Diwali Sale” between 27th-29th October. Discounting for user acquisition is understandable, but if this is the retention strategy then the future looks blurred.
We mostly hear buyers criticising the e-tailers for poor service or wrong orders being shipped. However, the story from sellers’ side is not rosy either. Scams, rejecting/returning orders and discounts are becoming habits. Of course the small retailers are losing market and would be squeezed out of business as they cannot keep up with discounts and scams. The overall GMV for these e-tailers may-be growing but the business of making loss is something that I fail to understand.
For the sake of the e-commerce industry, there needs to be very stringent checks in place to discourage people from taking such unfair advantages. As customers, we’ve also been on the other side when people have gotten soaps and bricks in place of expensive electronic items they’ve ordered online. In a classic case of “what goes around, comes around”, we wonder if it is the same scammers’ returned packages that are making their way back to innocent customers?
E-Commerce needs to be viable to both the buyers and sellers. Yes, the Customer is King, but he certainly isn’t always right.
